Insights

The European Union (the “EU”) has introduced Directive 2024/1203 of the European Parliament and of the Council of 11 April 2024 on the protection of the environment through criminal law and replacing Directives 2008/99/EC and 2009/123/EC (the “Directive”), a legislative act  that significantly reinforces existing environmental protection laws, with a particular focus on ship recycling practices. One of the most significant aspects of the Directive is the introduction of criminal penalties for individuals who violate the newly introduced ship recycling rules. It is also important to note that both Directive 2008/99/EC and Directive 2009/123/EC dealt with criminal liability in the context of environmental protection.

From a local perspective, even though Malta does not provide ship recycling facilities, it is expected that Subsidiary Legislation 234.56, namely the ‘Merchant Shipping (Ship Recycling) Regulations’ will be amended to reflect the provisions of the Directive as will be detailed below, especially since Malta serves as an ideal platform from which the ship recycling process can be initiated.

This Directive aims to enforce stricter compliance, placing greater responsibility on ship owners, managers, and brokers to adhere to EU regulations regarding where and how ships are scrapped. This move is particularly aimed at curbing the common practice of scrapping ships on beaches in South Asian countries, namely India, Pakistan and Bangladesh, where environmental and safety regulations are often much more lenient. The Directive not only clarifies legal ambiguities but also introduces severe penalties for non-compliance, making it a crucial turning point in environmental law enforcement across the EU.

EU Member States are required to implement these measures by May 21 2026, targeting both natural and legal persons. Individuals found guilty of non-compliance could face bans from holding management or public office positions, with the possibility of even harsher penalties, such as terms of imprisonment ranging from three to ten years. Legal entities, including companies, could face fines of up to 5% of their global annual turnover, capped at forty million euros. Additionally, profits from illegal transactions may be confiscated, and companies could be obliged to remedy any environmental damage caused by their actions.

Implementation of the Directive is expected to significantly increase the risk of criminal prosecution for violations, potentially altering the day-to-day practices global ship recycling for the better. Companies may need to reconsider using non-EU certified shipyards, even those certified under the Hong Kong International Convention for Safe and Environmentally Sound Recycling of Ships (the “Hong Kong Convention”) which will become effective as of June 26 2025, as these may not meet the EU’s stringent standards. Failure to comply could lead to severe legal repercussions, once again strengthening the shift in where and how ships are recycled globally.

With the introduction of the Hong Kong Convention as of next year, the goal with this legislative act is to ensure that ships, when being recycled after reaching the end of their operational lives, do not pose unnecessary risks to human health, safety or the environment. Ships must be designed, constructed, operated and prepared for recycling in a manner that ensures safety and environmental protection and are required to carry out an inventory of hazardous materials, which will be specific to each individual ship which must be maintained throughout the ship’s life and verified through surveys. Certified ship recycling facilities must provide a ship recycling plan detailing how each ship will be recycled, whereby all of their activities are reported to ensure compliance. Signing parties to the Hong Kong Convention are required to enforce these provisions through national legislation and ensure that recycling facilities under their jurisdiction are in adherence with the convention.

To mitigate legal risks, companies and their decision-makers are strongly advised to closely monitor the development of these new criminal laws and integrate compliance strategies into their planning processes. The Directive provides clearer guidelines on what constitutes as a criminal offense, resolving previous uncertainties surrounding the legal consequences of improper ship scrapping.

Beyond ship recycling, the Directive also establishes minimum rules for defining environmental crimes across EU Member States, replacing the older Directive 2008/99/EC of the European Parliament and of the Council of 19 November 2008 on the protection of the environment through criminal law and Directive 2009/123/EC of the European Parliament and of the Council of 21 October 2009 amending Directive 2005/35/EC on ship-source pollution and on the introduction of penalties for infringements. It expands the range of environmental offenses that must now be incorporated into national laws, offering clearer definitions of unlawful activities.

The Directive introduces several new environmental crimes, including the marketing of harmful products, the manufacture and use of hazardous substances, illegal use of mercury and other restricted materials, non-compliance with environmental impact assessments, illegal waste management and recycling, ship-source pollution and illegal water abstraction. It also covers breaches of regulations concerning deforestation, invasive species, and ozone-depleting substances. Both crimes committed intentionally or negligently are punishable, with penalties also applying to those who incite, aid, or abet such crimes.

To strengthen enforcement even further, the Directive requires Member States to establish mechanisms for tracing, identifying, freezing and confiscating assets related to environmental crimes. It also specifies aggravating circumstances, such as ecosystem destruction, use of forged documents, involvement of public officials and repeat offenses. Mitigating circumstances are offered for those who restore the environment or cooperate with authorities whereby whistleblowers who report environmental crimes are protected from retaliation under both EU and national laws.

It is therefore clear that the Directive presents a significant advancement in the EU’s efforts to protect the environment by expanding the scope of environmental crimes and enforcing stricter compliance in ship recycling practices, with the aim of discouraging unlawful activities and promoting sustainable practices. As Member States prepare to implement these measures by May 21 2026, the Directive is composed to have a profound impact on environmental law enforcement and ship recycling practices both on an EU and on global scale.

Ms. Martina Naudi (Legal Intern) contributed to the researching and drafting of this article.